DEFINITIONS

It’s hard enough being in a tough financial situation and having to face so many options and challenges. But hearing terms you’re not completely familiar with can make you more anxious. We’re here to help you and make you as comfortable during this process as possible. Below are a handful of terms you’ll probably hear. We’ve tried to explain them as simply as possible, but please ask us to explain things more if you’d like. Or, if you have any terms you don’t see here but want explained, please feel free to ask.

Loss Mitigation

Loss mitigation is the process of trying to protect homeowners and mortgage owners from foreclosure. It might refer to any one of several strategies that could be employed to get and keep homeowners current on their mortgage payments and in their homes.

Foreclosure

Foreclosure is the legal process where the mortgage Lender obtains ownership of the house (repossess the property). This happens when a homeowner fails to make their mortgage payments and has defaulted on the terms of their mortgage loan.

What happens if I walk away from my home and let it go to FORECLOSURE?

I frequently hear this question from homeowners – mostly from homeowners who feel they have no other options, or are simply exhausted from unsuccessful attempts at working things out with their lender. They mistakenly believe that simply “letting the home foreclose” is the end of their problems with their Mortgage

The truth is that If you let your house go to FORECLOSURE your lender CAN come after you for the difference so it is best to seek other alternatives to walking away.

Forbearance

A Forbearance Plan is when the lender agrees to reduce or even suspend mortgage payments for a period of time and agrees not to initiate a foreclosure during the forbearance period.

Repayment Plan

A repayment plan on a mortgage helps you get back on track after a period of missed payments. While your mortgage lender already charges you a fixed amount per month, a repayment plan adds a portion of the past-due amount to your bill for a period of several months until you’re caught up.

Loan Modification

A Loan Modification is any change to the original terms of your loan including extending the term, lowering the interest rate or changing the loan type.

Short Sale

A Short Sale is when a financially distressed homeowner sells their property for less than the amount due on the mortgage. The buyer of the property is a third party (not the bank), and all proceeds from the sale go to the Lender.

Deed In Lieu Of Foreclosure

A deed-in-lieu of foreclosure is an arrangement where you voluntarily turn over ownership of your home to the lender to avoid the foreclosure process.